Oil moves away from 2021 lows due to greater financial calm

Oil moves away from 2021 lows due to greater financial calm

oil rises this Tuesday March 21 and extends its recovery from 15-month lows that reached on the eve, since the credit suisse bailout eased concerns about risks of the banking sector that could affect economic growth and fuel demand.

After the initial nervousness on Monday, Sentiment in financial markets has improved after the acquisition of Credit Suisse by UBS and after the main central banks said they would increase market liquidity and they would support the banking system.

The crude Brent It rose 97 cents, or 1.3%, to $74.73 a barrel, marking its second day of gains after hitting lows since 2021. West Texas Intermediate (WTI) US oil gains $1.02, or 1.6%, to $68.91 a barrel.

“Banking jitters may have taken a breather yesterday, but it’s still a factor,” he said. Stephen Brennock, of the PVM oil brokerage, in dialogue with Reuters. “Although an immediate crisis appears to have been averted, another selloff is still feared.”

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The attention of the investors now focuses on the decision to be taken on Wednesday by the United States Federal Reserve on interest rates when their two-day meeting concludes.

Since the banking troubles began this month, markets have revised down expectations for an upcoming Federal Reserve rate hike, from 50 basis points to 25 basis points.

A meeting of the main OPEC+ ministers is scheduled for April 3, which includes members of the OPEC plus Russia and other allies. OPEC+ sources told Reuters that the Falling prices reflect banking fears, rather than a deterioration in the balance between supply and demand.

The latest reports on US oil inventories, which a Reuters poll expected to show crude and product inventories falling. The first report, from the American Petroleum Institute, will be published this Tuesday.

OPEC Secretary General Haitham al-Ghais, said the group’s agreement to reduce production helped address the challenges facing global oil markets, the Iraqi Oil Ministry reported on Tuesday. He added that OPEC’s most important objective is to achieve stability and balance between supply and demand.

Last NovemberFaced with weakening crude oil prices, members of the Organization of the Petroleum Exporting Countries (OPEC), along with Russia and other allies – a group known as OPEC+ -, reduced their production target by 2 million barrels per day. That was the biggest cut since the early days of the COVID-19 pandemic in 2020, and the same reduction applies for all of 2023.

Source: Ambito

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